We have a government which is less smart than is presumed. Which right-thinking government releases a list of names provided to it by Exxon without verifying the information received, ensuring confidentiality is protected, and without any clear idea as to what constitutes local content.
The government is out of its depth. Its action in releasing such a ridiculous list raises serious concerns as to whether the government can now be trusted with exercising oversight over the operations of ExxonMobil.
It was NOT the responsibility of the government to release the names of those who provide goods and services to ExxonMobil. That is not the government’s job. But the government has assumed the role of handmaiden of ExxonMobil. The contract it signed with the powerful multinational not only gives the government responsibility for paying any taxes on behalf of Exxon, but now it seems as though it is being its servant in releasing the names of those who do business with the company.
The government is out of order. It has no right doing Exxon’s bidding. Its role is to verify that ExxonMobil is complying with its local content requirements under its contract.
The government is hanging out Exxon ‘fine things’ in public. Instead of releasing the names of 227 individuals and firms with which it does business (it was supposed to be over 300) Exxon has foisted that role on government.
The government was not being smart when it blindly published the information which was supplied to it. Had it taken the trouble to verify the information, it would have appreciated that much of what it published is not usually considered as local content. If it had done its homework, the government would have avoided the mistakes which it has now exposed.
The credibility of the information has already been called into question. Kaieteur News has already found duplications. One major accounting firm which is listed as having provided services to ExxonMobil has denied that it ever did so.
A lot of the information provided is laughable. ExxonMobil was so desperate to demonstrate that the Guyanese economy is benefitting from its operations that even the most frivolous of services are listed as part of its local content contribution.
The taxi drivers who provide transportation to the company, probably including short drops, are listed. Even regular services which are provided to every property owner, such as garbage disposal, are listed. Most of these services would have been provided anyway, with or without Exxon. Exxon is not adding local content by listing garbage disposal and utilities.
Government was NOT very smart when it failed to consider the legal ramifications of publishing the list without obtaining the consent of those named. The government has exposed information which can be considered as privileged or confidential. Not everyone wants their competitors to know that they are doing business with Exxon.
Since the value of the services was not and could not be stated, it exposes many of these individuals to being summoned by the taxman. A taxi driver who may have only done a few short drops for Exxon (and who would have had work in any event) may be presumed by the taxman to be receiving substantive business from Exxon, and therefore will now be likely to be audited. His business dealings are now in the public domain without his permission. How smart was the government?
But the most depressing aspect of this whole affair is the woeful lack of understanding, by the government, of local content. Quite correctly, a local content expert, Rene Tissot, has pointed out that newspaper ads and hotel services are not considered as local content. He pointed out that the government has failed to distinguish between local content and spending that benefits the economy.
He explained that local content involves the transfer of skills and technology, the use of local manpower, and the growth of local manufacturing. Local content involves lasting value, such as industrialization, which the operations of the foreign companies provide. Buying a cigarette at the local street corner is not local content.
Local content, as he pointed out, is about the depth and value of the investment.
Local content is not listing every person from whom you buy something or who provides a service to you. Local content is defined as the domestic portion of a final good or service. For example, local content requirements may specify that 20% of technical employment must be locals or that 60% of the shipping services must be provided by local firms.
The government does not seem to understand this. Just what does it understand?
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